Leading to over US$500M in liquidations in 24 hours

There was a big plunge in the crypto market today (August 19) with data from crypto analytics firm, Glassnode showing Bitcoin futures long liquidations touching a new eight-month high.

This morning the price of bitcoin crashed below US$22,000. This plunge resulted in major cryptocurrencies losing key support and falling to new monthly lows after a prolonged bullish surge over the past month.

Bitcoin, which was looking to break through the US$25,000 resistance level last week, fell below US$22,000 to register a new two-week low of $21,747. Cointelegraph.com reports that Ether, the second-largest cryptocurrency, surged past US$2,000 in the run to the Merge but has slumped by six per cent over the past 24 hours to register a new weekly low of US$1,726.

After weeks of bullish momentum, the flash crash also saw 157,098 traders get liquidated in the past 24 hours, resulting in total liquidations of over US$551 million.

Heavy losses incurred from crypto market

Data from Coinglass indicates that Bitcoin traders lost over US$203 million, followed by Ether traders at US$140 million. Market sentiment was highly bullish until the flash crash took place.

The value of short positions liquidated was only US$41 million against US$398 million in long positions. Bitcoins futures long liquidations reached an eight-month high of US$84,934,697.05 on OKX, breaking the previous high of US$48,630,183.66 observed on May 5.

The sudden plunge in the crypto market is being attributed to the United States Federal Reserve’s expected interest rate hike in September. August consumer price index data came out as lower than expected, leading to a bullish surge in crypto and foreign exchange markets alike.

Federal Reserve Bank of St Louis President James Bullard said he would favour an increase of 75 basis points. An interest rate hike by the Fed next month could lead to another downturn.

A similar interest rate hike of 75 basis points in June led to crypto market turmoil after an initial price surge.